Finnish Employment Contract

The Employment Contract
Duration of Employment Contract
Termination of an Employment Contract
Additional Information

The Employment Contract

An employment contract in writing gives many benefits to both parties to the contract. The contract can be used to prove what has been agreed upon. By using contract forms specially designed for the branch concerned, the parties can be sure that all terms required by law and having importance in the branch are included in the contract. A written contract gives the employee the message that the employer is a reliable contract party.

Design of the content of an employment contract

When designing the content of an employment contract, the employer should have at least the following material available: the collective agreement for the branch concerned, Employment Contracts Act, Working Hours Act and Annual Holidays Act, as well as an employment contract form for the branch, or a general employment contract form.

The content of the employment contract is affected at least by the following:

• the employer’s and the employee’s needs
• the provisions of the Employment Contracts Act defining which matters, as a minimum, should be agreed on
• the minimum terms set by the collective agreement for the branch – no contract can be concluded below that level
• the provisions of the Employment Contracts Act, Working Hours Act and Annual Holidays Act restricting the content of the employment contract

Information in writing

If there is no employment contract in writing prior to commencement of employment, or the information mentioned below does not appear in the existing employment contract, the employer shall without any separate request provide the employee with written information on the terms of the employment relationship. The information shall be given to the employee by the end of the first pay period. There is no need to give the information if the employment relationship for a fixed term will be shorter than one month.

If the same employer employs the same employee continuously for fixed terms shorter than one month under the same terms, the information shall be given within a month from the beginning of the first employment. There is no need to give the same information repeatedly if the terms do not change. If the terms for the employment relationship change, the employee shall be informed, in writing, of the new terms by the end of the pay period following the change.

Minimum content of a written employment contract:

• date of commencement of the work
• duration of a fixed-term employment contract and the ground for the fixed term
• trial period (when an agreement has been made on a trial period)
• place where the work is performed or, if the employee has no primary fixed workplace, an explanation of the principles according to which the employee will work in various work locations
• employee’s principal duties
• collective agreement applicable to the work
• ground for the determination of pay, and the pay period
• regular working hours
• manner of determining annual holiday
• period of notice and the grounds for determining it
• in the case of work performed abroad for a minimum period of one month, the duration of the work, the currency in which the monetary pay is to be paid, the monetary remunerations and fringe benefits applicable abroad, and the terms for the repatriation of the employee.

More Information:
Työsuojelupiirit provides extensive information on all aspects of the employment contract.

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Duration of Employment Contract

Indefinite or fixed-term

It is always allowed to employ persons for indefinite periods that remain valid for the time being. If the employer aims to employ a person for a fixed term, the fixed term shall be agreed on and there have to be justified grounds for it. The grounds shall be indicated in the employment contract. Such grounds are, for example:

• acting as a substitute
• seasonal work
• fixed-term project
• one-time work
• training period in an educational institute
• fixed term of a trainee contract

If the employer cannot indicate any fixed-term purpose for the employment contract, the employment contract is considered to be valid for an indefinite time.

Trial period

The purpose of a trial period is to find out the prerequisites for continuing the employment. This happens by going through a short trial period at the beginning of the employment relationship. An agreement has to be made on the trial period and its length. If the collective agreement to be applied requires a trial period for a certain time, the employer must inform the employee of the trial period when the employment contract is made. When no information has been given about this and the contract does not include a trial period, there is no trial period included in the employment relationship.

The trial period starts from the beginning of the employment relationship, and lasts uninterruptedly for the time period that has been agreed upon. The agreed trial period must not be prolonged. The maximum trial period is usually four months. If a fixed-term employment relationship is shorter than eight months, the trial period may not exceed half of the duration of the employment period. If the collective agreement to be applied by the employer restricts the duration of the trial period, the employer must not agree on a longer trial period.

More Information:
Työsuojelupiirit provides extensive information on all aspects of the employment contract.

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Termination of an Employment Contract

Period of notice, and expiration of fixed-term employment contracts

Employment contracts made for an indefinite period are usually terminated by one of the parties giving notice. The notice will be followed by a period agreed upon by the parties, or defined by the collective agreement or by law. During a trial period, either party may cancel the employment contract, in which case there will be no period of notice. Fixed-term employment contracts expire, without giving notice and without any period of notice, at the end of the fixed term, or when the agreed work is completed.

Protection against unjustified dismissal

The employer must not terminate an indefinitely valid employment contract without proper and weighty reason. Such reasons can be:

• serious breach or neglect of obligations of the employee, or such essential changes in the conditions necessary for working related to the employee’s person, or
• the work has diminished substantially and permanently for financial or production-related reasons, or for reasons arising from reorganisation of the employer’s operations.

Employees who have neglected their duties arising from the employment relationship shall not be given notice before they have been warned and given a chance to amend their conduct. Additionally, the employer shall, before giving notice, find out whether it is possible to avoid giving notice by placing the employee in other work.

If the work of employees has substantially and permanently diminished, they must not be given notice if they can be placed in, or trained for, other tasks by offering them work that is equivalent to that defined in their employment contracts. If no such work is available, they shall be offered other work equivalent to their training, professional skill or experience.

The employer shall, before giving notice, make sure that the giving of notice is based on facts and that its grounds fulfil the conditions for giving notice. The employer should ask for advice and help from their employer organisation.

Right to cancel the employment contract

It is possible, in exceptional circumstances, to terminate an employment contract by cancelling it if one of the parties of the contract seriously neglects his or her duties or violates the employment contract. In such a case the employment contract is terminated with immediate effect without any period of notice. The right to cancel an employment contract requires such a weighty reason that it is unreasonable to expect that the person who cancels the contract should continue the contractual relationship for the period of notice.

More Information:
Työsuojelupiirit provides extensive information on all aspects of the employment contract.

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